Friday, December 17, 2010

Energy Prices Predicted To Remain Relatively Stable

I'd like to wrap the week of with an article The New York Times published about the Department of Energy's new report on the future of energy prices up until 2035:
The information released on Thursday was based on what the government calls a reference case, or estimate; its report in March will also include a low case and a high case. Among the major changes from last year, it projected that the price of a kilowatt-hour of electricity in 2035 will be 9.2 cents; last year it estimated that would be 10.3 cents. The price in 2009 was 9.8 cents.
Lower electricity prices are important because as they decline, the economic argument for building nuclear reactors, wind machines or solar cells gets weaker, as does the economic argument for more energy-efficient appliances.
I do suggest that you go over an read the entire article, because there is a lot of good information outside of this small section I stole.  While my first reaction to this article was to throw up on my keyboard, there are a lot of things that this article does not address.

Though the NY Times is not-so-subtly hinting that alternative energy companies are screwed, this simply is not the case.  While future prices of energy don't look that threatening, this doesn't mean that there won't be a market for alternative energy and energy efficiency.

Many other countries outside of the United States (yes, the US is still in fact part of the rest of world) are still pursuing alternative energy at an aggressive rate.  China is a great example of this as they have become the #1 target for alternative energy investment.  Call me crazy, but I believe America would do well to try and compete within the international marketplace.

Also, lets face it, these predictions don't mean crap.  Yes they are formulated by highly educated people who would probably beat me at Scrabble, but that doesn't mean that they have a crystal ball that they can see the future in.

Mustaches! I see mustaches in my crystal ball!
Here is are two facts that are undeniable:
  1. Natural resources such as oil, coal, and natural gas are finite
  2. Even in more efficient manners, burning these resources produce large amounts of carbon emissions
I know that economic forces pretty much dictate anything and everything that occurs, but it does seem relatively backwards that we are still investing as much money and time into these industries that are clearly going to fail at some point.  Yes, it is near impossible to estimate the exact amount of these resources left, but this should scare the shit out of investors, not place them at ease.

Ultimately, I hope that America still provides friendly economic policies for these emerging alternative energy and energy efficiency companies, because in the long run they will be what keeps the US competitive in the world marketplace.

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